bid

(noun)

The submitted price at which the trader is willing to buy.

Related Terms

Examples of bid in the following topics:

  • Market Maker

    • Market makers provide liquidity to securities markets by submitting both bids and asks on a security.
    • The difference between the highest bid and the lowest ask price is called the bid-ask spread .
    • Market makers are a company or individual that quotes both an ask price and a bid.
    • It is the bid-ask spread that provides the money-making opportunity.
    • There is a bid-ask spread of $1.10.

  • Defining Spread

    • The bid–offer spread for securities is the difference between the prices quoted for an immediate sale (offer) and an immediate purchase (bid).
    • The size of the bid-offer spread in a security is one measure of the liquidity of the market and size of the transaction cost.
    • The bid–offer spread is an accepted measure of liquidity costs in exchange traded securities and commodities.
    • On any standardized exchange, two elements comprise almost all of the transaction cost—brokerage fees and bid-offer spreads.
    • Under competitive conditions, the bid-offer spread measures the cost of making transactions without delay.

  • Valuing the Target and Setting the Price

    • To prepare an appropriate bid for a target company, the buyer has to accurately value the target company through the due diligence process.
    • In order to prepare an appropriate bid in the mergers and acquisition process, the buyer must be able to accurately value the target company.

  • Price Transparency

    • Rather, the dealers earn revenue by means of the spread, or difference, between the price at which the dealer buys a bond from one investor–the "bid" price–and the price at which he or she sells the same bond to another investor—the "ask" or "offer" price.
    • The bid/offer spread represents the total transaction cost associated with transferring a bond from one investor to another.

  • Reasons to Study Finance

    • Finance helps explain what trends in silver bids mean, but more importantly, why people care about them (even those not trading silver).

  • Signaling

    • Investors can use this knowledge about managers' behavior to inform their decision to buy or sell the firm's stock, bidding the price up in the case of a positive dividend surprise, or selling it down when dividends do not meet expectations.

  • Types of Market Organizations

    • Dealer markets, also called quote-driven markets, centers on market-makers (or dealers) who provide the service of continuously bidding for securities that investors want to sell and offering securities that investors want to buy.
    • Dealers earn a profit on the bid-offer spread.

  • The Nature of Dividends

    • Investors can use this knowledge about managers' behavior to determine their decision to buy or sell the firm's stock, bidding the price up in the case of a positive dividend surprise or selling it down when dividends do not meet expectations.

  • NYSE

    • Buyers and sellers meet at a physical location (in this case, Wall Street) and announce their bid or ask prices.

  • NASDAQ

    • The NASDAQ helped lower the spread (the difference between the bid price and the ask price of the stock), but paradoxically was unpopular among brokerages because they made much of their money on the spread.